Italy's Populists Flirt With a Deal to Create a Government

They had suggested a candidate for prime minister would be named as early as Monday evening.

The M5S and the League have been negotiating a power-sharing deal since last Wednesday, when Mr Salvini's right-wing coalition partner, former prime minister Silvio Berlusconi, gave the green light for the pair to form a government without his Forza Italia (FI) party.

Talks between Mr Salvini and Mr Mattarella took place late on Monday at the president's office.

Joshua Mahony, market analyst at IG, said: "The prospect of a deal between the Five-Star Movement and League party has done little to boost Italian stocks this morning, with a host of popular policies promising to shift the public finances back into trouble". He listed conflicting views on immigration, attitudes towards the European Union, the justice system and the usefulness of new spending on infrastructure.

On Monday, Salvini claimed to be speaking on behalf on the 12 million people who voted for the right-wing coalition in March, despite entering into negotiations with M5S without his allies, and Berlusconi saying his party would not back an M5S-League alliance in parliament.

"We are working night and day" to iron out issues with the M5S, Salvini added.

On Sunday, it seemed like an EU-scaring deal had been struck between the anti-establishment 5Star Movement and far-right League.

Di Maio and League leader Matteo Salvini both said they had made policies that will cut taxes, boost welfare and increase efforts to cap immigration, according to Reuters.

Given favourable opinion poll numbers for the League, "we should be the first to say, 'what's the point of trying to square this circle, let's leave everything in hands of the president with the idea of going [back] to elections as soon as possible, '" he said. "They explained to me that that they are also assessing another figure, [fellow academic Giuseppe] Conte, and they have not said yet who they have chosen", Sapelli told the Italian Ansa news agency.

Di Maio, 31, announced that the finalised deal would be put to an online vote for Five Star members.

Their flagship economic measures are also seen as too ambitious and expensive for a heavily indebted country like Italy, which has the second-largest debt in the eurozone after Greece.

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